WHY DO ENTITIES GET INVOLVED IN PROLIFERATION? EXPLORING THE CRIMINOLOGY OF ILLICIT WMD-RELATED TRADE

On 1st February, this paper was published which seeks to provide an original approach to WMD-related illicit trade by drawing on criminology and focusing on the transactional level.  Specifically, the article discusses the “rational-choice” model as a way to understand an entity’s involvement in illicit trade, and considers also the limitations of this approach, as well as the role that opportunity plays in an actor’s decision to engage in illicit trade.  Worryingly (but not unexpectedly – see Dr Brewer’s recent piece on proliferation financing that makes the same point), the article draws the conclusion that the prospects of deterring illicit trade using export controls and related criminal sanctions are limited; and that the prospects of deterring illicit WMD trade are limited by the low levels of certainty in export-control enforcement (i.e. it won’t get checked and/or you won’t get caught).  Another conclusion is that non-proliferation successes are more likely to be found in further efforts to develop tools to address proliferation opportunities.  If you have $157 to spare (or $42.50 for 24 hours’ access), well worth getting, I think.

http://www.tandfonline.com/doi/full/10.1080/10736700.2018.1423718

MARITIME RISKS IN 2017: A REVIEW

On 6th February, Control Risks published its review of maritime risk stories from 2017 and relevant statistics. It summarises that it sees global maritime security incidents continue to decline, but new threats are emerging.   Amongst the headlines are –

  • 5% decrease in global maritime security incidents
  • 25% of piracy incidents took place in the Gulf of Guinea
  • 83% decrease in kidnap incidents in South-East Asia
  • Spike in Somali piracy and a new threat off Yemen
  • 2-fold increase in incidents off Venezuela

https://www.controlrisks.com/our-thinking/insights/reports/maritime-risk-2017-in-review

ISLE OF MAN UPDATES LIBYAN AND SOUTH SUDAN SANCTIONS LISTS

On 6th February, the Isle of Man published 2 news releases advising of updates to its sanctions programmes – the updating of details of the Lynn S for the purposes of Libyan sanctions; and the listing of 3 names for the purposes of the South Sudan sanctions regime.

https://www.gov.im/news/2018/feb/06/financial-sanctions-libya/

https://www.gov.im/news/2018/feb/06/financial-sanctions-south-sudan/

THINGS YOU MAY HAVE MISSED – FEBRUARY 5

5th February 2018

 UK BREXIT SECRETARY WELCOMES FREE PORT STUDY

Multimodal reports that the UK’s Brexit Secretary of State has welcomed a proposal for a study into the benefits of free port status for the Tees region – which contains Teesport. Free ports, though inside a country’s geographical boundary, are seen as outside the nation for customs purposes and remove customs duties.  None currently remain in the UK, having been phased out several years ago due to lack of interest and use, and because alternative customs arrangements under applicable EU law existed that appeared to make them superfluous.

https://www.multimodal.org.uk/news/uk-brexit-secretary-welcomes-free-port-study?dm_i=2J31,179F8,5EODT1,3S86P,1

CHINA CONSTRUCTION BANK FINED FOR INADEQUATE AML/CFT CONTROLS IN SOUTH AFRICA

FT.com reports that South Africa has imposed fines on the China Construction Bank $6 million for lax AML/CFT controls.

https://www.ft.com/content/a17d7dea-0a34-11e8-8eb7-42f857ea9f09

MAJOR BANKS BAN USE OF CREDIT CARDS TO BUY CRYPTOCURRENCY

The Verge reports that 3 major banks in the US (Bank of America, JP Morgan Chase and Citigroup) have said that they won’t allow cryptocurrency purchases on their credit cards.  Lloyds Banking Group in the UK have also done so.  The move is said to be to protect customers from unnecessary exposure to losses.

https://www.theverge.com/2018/2/4/16971666/cryptocurrency-bitcoin-jpmorgan-chase-bank-of-america-citigroup-credit-card

https://www.forbes.com/sites/naeemaslam/2018/02/05/banks-banning-cryptocurrency-purchase-on-credit-cards-why/#43ab2cba3cf9

HUGE CANADIAN MONEY LAUNDERING INVESTIGATION IN BRITISH COLUMBIA

The Times Colonist on 4th February carried an extensive and interesting article about the RCMP “E-Pirate” money-laundering investigation that delved into metropolitan Vancouver’s underworld of fentanyl labs, gun sales and violent “dial-a-dope” gangs (including the Red Scorpions). It says that an offshoot investigation, code-named “Prophet”, grew from extensive surveillance of the many alleged employees of E-Pirate’s primary target.  Documents allege a network of organized criminals established a massive underground banking channel between Richmond and Mainland China, using VIP gamblers from Macau to buy chips, mostly at River Rock Casino, in order to launder hundreds of millions in drug cash. The operation allowed ultra-wealthy Chinese businessmen, some allegedly with ties to organised crime, to move money from China to Canada while evading China’s tight capital export controls.  The articles says that Postmedia News has pieced together the story of Prophet through extensive investigation of property in British Columbia, lending and legal documents, including 2 major civil forfeiture claims, and interviews with law enforcement sources not authorized to be identified on the record.

http://www.timescolonist.com/news/b-c/huge-b-c-money-laundering-investigation-plvots-to-drugs-and-guns-1.23164180

PETER CONLON: INVESTIGATORS LOOKING FOR MISSING FUNDS IN MALTA, BELGIUM, ISLE OF MAN

On 5th February, in an article about the ongoing investigation into the alleged misappropriation of €3.8m for large charities by Irishman Peter Conlon in the Irish Independent, it is mentioned that it is understood investigators are looking into assets held by Peter Conlon in Malta, Belgium and the Isle of Man.  Conlon is said to be in custody in Switzerland, having been arrested in December.  The liquidator for his company, Pembroke Dynamic Internet Services, said that “it would appear that at least 800 charities may be affected by the liquidation of the company, which is connected to the Ammado Foundation”.

https://www.independent.ie/irish-news/courts/i-dont-know-where-he-lives-brother-of-boss-in-38m-probe-36567277.html

IRISH COURT OF APPEAL BROADENS AMBIT OF THE DOCTRINE OF CONTEMPT OF COURT

On 1st February, law firm Ronan Daly Jermyn published an article in which the firm said, in discussing Director of Public Prosecutions v Independent News and Media PLC, Claire Grady, Stephen Rae and Internet Interactions Limited, the Court explored the doctrine of contempt of court and indicated that a publication may be found to be in contempt of court even where the material published does not deal directly with the subject of the charges against an accused.

https://www.rdj.ie/insights/court-of-appeal-broadens-ambit-of-the-doctrine-of-contempt-of-court?s=0.214000188657

WHAT A COMPANY SHOULD DO WHEN CONFRONTED WITH A WARRANT?

In a briefing on 2nd February, Rahman Ravelli in the UK says that, if the police, HMRC, SFO, FCA or other agency arrive at a business premises with a  search warrant, it is a challenge for any corporate.  What, it asks, should a company do next?  The briefing covers such elements as digital “seizures”, legally privileged material, and examining the terms of the warrant and challenging it.

https://www.lexology.com/library/document.ashx?g=d4d10edf-0ccc-4cce-be3d-c30e23969422

MARINE FINANCE: BANKING HANDY GUIDE

On 2nd February, Brodies LLP produced a 5-page pdf guide to marine finance – a form of asset finance used in the maritime industry, particularly to finance the construction or purchase of ships.  Funding can be provided for a single ship, for multiple ships and/or for ships under construction or already operational.

http://www.brodies.com/sites/default/files/marine_finance_banking_handy_guide_web.pdf

THE MAKING OF A “SUPER-SAR”: A CASE STUDY

On 1st February, White & Case produced a briefing about submitting a report to the NCA jointly with another regulated firm, i.e. a so-called “Super-SAR”.  However, the firm cautions that the new regime is complicated and the drafting within the amended sections of POCA 2002 is not clear.  The new information sharing scheme was introduced with the aim of improving the provision of SAR intelligence by providing consolidated information to the NCA. It remains to be seen how effective this will be in practice.

https://www.whitecase.com/publications/alert/making-super-sar-case-study

BRAZIL AND UK AUTHORITIES SIGN MOU TO STRENGTHEN EFFORTS AGAINST WHITE COLLAR CRIME

Mayer Brown on 1st February reports on the SFO and Brazil’s Office of the Prosecutor General (PGR) entering into a MoU to strengthen international co-operation and exchange of information between these agencies in fraud, corruption and other white-collar crime investigations and enforcement actions.

https://www.mayerbrown.com/brazil-and-uk-authorities-sign-mou-to-strengthen-efforts-against-white-collar-crime-02-01-2018/

HEAD OF NIGERIA’S ANTI-CORRUPTION COURT CHARGED WITH BRIBERY

The Times of Israel on 5th February reported that a senior judge handling country’s graft cases accused of demanding kickback from suspect in return for lighter sentence.  Danladi Umar was accused by the country’s anti-graft body EFCC of demanding $27,800 from a suspect “for a favour to be afterwards shown to him in relation to the pending charge,” according to court documentation.

https://www.timesofisrael.com/head-of-nigerias-anti-corruption-court-charged-with-bribery/?src=ilaw

BILLION-DOLLAR BUST: HOW AUSTRALIA HELPED TRAP THE WORLD’S MOST WANTED MONEY LAUNDERER

Radio Australia on 5th February carried an article outlining how more than $1 million was handed to a known criminal and hope to catch him laundering it, and the work of the little-known Australian Crime Commission attempting to track large sums leaving the country, with Altaf Khanani named as the launderer based in Dubai.  A Gujarati who had originally settled in Karachi after the partition of India and Pakistan, and who was thought to launder money for a range of organisations, including Lebanese mafia syndicates in western Sydney, Hezbollah financiers, ice traffickers, and “bikies” gangs. He had been behind Khanani and Kalia International, or KKI, formed in the 80s and, by the late 90s, one of the largest currency traders in Pakistan, with a web of remittance agents across the world – in 2007 and 2008 alone, KKI’s official banking records showed the company handled $2.3 billion.  It was said that Khanani was shifting huge volumes of hard currency across the border into war-ravaged Afghanistan, much of it going to heroin producers.  Eventually he was lured to panama, where the DEA had him arrested.

http://www.radioaustralia.net.au/international/2018-02-05/billiondollar-bust-how-australia-helped-trap-the-worlds-most-wanted-money-launderer/1733784?src=ilaw

PETROFAC UPDATES ON SFO INVESTIGATION

Proactive Investor reports that Petrofac Ltd has told the market that it continues to engage with the UK SFO in relation to an investigation launched last year.  The investigation into suspected bribery, corruption, and/or money laundering – is wide-ranging in time and scope, and relates to the activities of the company, its subsidiaries and officers; and engagement with the SFO has involved the interview of company directors including the chairman and executive directors.

www.proactiveinvestors.co.uk/companies/news/191131/petrofac-updates-investors-on-uk-serious-fraud-office-probe-191131.html

SINGAPORE SEEKS TO AMEND LAW AFTER ‘TOO LOW’ MEGACHURCH FRAUD SENTENCES

Reuters on 5th February reported that Singapore’s government is seeking to amend a law that led to shortened sentences for church leaders – including City Harvest Church’s co-founder Kong Hee, convicted of using funds to support his wife’s pop-singing career – convicted of misusing millions of dollars, in a case that has gripped the city-state where there is little tolerance for corruption.

https://uk.reuters.com/article/uk-singapore-church-lawmaking/singapore-seeks-to-amend-law-after-too-low-megachurch-fraud-sentences-idUKKBN1FP0N8?rpc=401&

RUSSIAN CENTRAL BANK NEARS CLOSURE OF INVESTIGATION INTO FRAUDULENT FOREX COMPANIES

Finance Feeds reports that the regulator will soon publish the results of its probe into a number of illegal forex dealers with no licences to offer forex services in Russia but are targeting Russian clients using foreign websites. The damage caused by their activities is said to exceed several billion roubles.  It is said that Bank of Russia has managed to transfer 142 cases of illegal FX companies to the prosecutors’ office last year

https://financefeeds.com/russian-c-bank-nears-closure-investigation-fraudulent-forex-companies/

AUSTRALIAN COSMETICS AND HEALTH COMPANY BEGINS IMPORTING CANNABIS PRODUCTS

Customs Today reports that natural medicine and cosmetics company Bod Australia has announced it will be importing cannabis extracts to use in its latest product. Under its permit issued by the Office of Drug Control, Bod will now begin importing cannabidiol (CBD) powder to create a new cannabis-based wafer which is absorbed under the tongue.

http://www.customstoday.com.pk/cosmetics-and-health-company-begins-importing-cannabis-products/

DUBAI ADVISER CONVICTED IN LANDMARK CRIMINAL CASE

International Adviser on 30th January reported that a financial adviser from the UK has been convicted of running a business in Dubai without a licence, in what is understood to be the first conviction of its kind in the UAE.  Neil Grant, originally from Scotland, was convicted by the Dubai Criminal Court of not registering his company Prosperity Offshore Investment Consultants with the Insurance Authority.

https://international-adviser.com/dubai-adviser-convicted-in-landmark-criminal-case/

STATUS AND TRENDS IN SPENT FUEL AND RADIOACTIVE WASTE MANAGEMENT

IAEA has this new report (at €39) available.  Based on the outcome of a collaborative project undertaken by the IAEA OECD NEA and the European Commission it provides a global overview of the status of radioactive waste and spent fuel management concerning inventories programmes current practices technologies and trends. It includes an analysis of national arrangements and programmes for radioactive waste and spent fuel management an overview of current waste and spent fuel inventories and estimates of future amounts. International and national trends in these areas are also addressed.

https://www.iaea.org/publications/11173/status-and-trends-in-spent-fuel-and-radioactive-waste-management

GANGS AS TERRORISTS PROPOSAL “IS A SMOKE SCREEN” IN GUATEMALA

Insight Crime on 2nd February reports that in what it says appears to be a smokescreen to distract from efforts to undermine anti-corruption initiatives, Guatemala’s new interior minister asked Congress to reform the penal code in order to designate the country’s gang members as terrorists.

https://www.insightcrime.org/news/brief/terrorist-gangs-smoke-screen-guatemala-institutional-crisis/

EL SALVADOR CONVICTS FIRST MAYOR FOR TIES TO GANGS

On 2nd February, Insight Crime reported that a former El Salvador mayor has become the country’s first mayor to be convicted of illicit association with gangs.  José Elías Hernández, the former mayor of El Salvador’s Apopa municipality on the outskirts of the capital San Salvador, was convicted  of illicit association with the Barrio 18 gang and sentenced to 12 years in prison.

https://www.insightcrime.org/news/analysis/elsalvador-convicts-mayor-ties-gangs/

UK POLICE OFFICERS COULD LOSE 28 DAYS A YEAR DUE TO SILOED DATA

Tech UK on 31st January reported that each UK police officer could potentially be losing up to 28 working days a year due to siloed data, according to new research.  he study was conducted to explore how police forces are using data and what the barriers are to doing so more effectively. Front-line and senior employees from 34 regional police forces across the UK were surveyed. The white paper and news release are available at the following link –

http://www.techuk.org/insights/opinions/item/12203-police-officers-could-lose-28-days-a-year-due-to-siloed-data

OUTLOOK FOR ANTI-GRAFT INITIATIVES IN HONDURAS AND GUATEMALA

In a video available on its website, Insight Crime addressed the current status and outlook of anti-corruption initiatives taking place in Honduras and Guatemala.

https://www.insightcrime.org/news/analysis/weekly-insight-outlook-anti-graft-initiatives-honduras-guatemala/

ARRESTS AGAIN POINT TO PARAGUAY PRESIDENT’S CONTRABAND CIGARETTES

Insight Crime on 31st January reported that cigarettes manufactured by a firm belonging to the family of Paraguay’s president have once again been seized after being smuggled across the border into Brazil, firmly pointing, it says, towards the involvement of powerful Paraguayan elites in the booming business.  The Tabacalera del Este company is owned by the family of Paraguay President Horacio Cartes.  According to ABC Color, smugglers transport cheaper Paraguayan cigarettes across the border to Brazil with the intention of selling them at a marked-up price.  With members of Brazil’s powerful PCC found to be distributing cigarettes manufactured by Tabacalera Del Este, there are substantial implications that criminal groups may be allied with political elites in Paraguay to benefit from the lucrative industry.

https://www.insightcrime.org/news/brief/arrests-point-paraguay-president-contraband-cigarettes/

ISRAELI WEAPONS HOUSE RAFAEL HAS ASIAN NATIONS IN ITS SIGHTS

Flight Global on 5th February reported that India and Australia are among the Asia-Pacific nations that Israeli company Rafael has firmly in its sights with its current and in-development weapons and targeting systems.

https://www.flightglobal.com/news/articles/analysis-israeli-weapons-house-rafael-has-asian-nat-445133/

UKRAINE NATIONAL POLICE ANNOUNCES CREATION OF NEW UNIT TO COMBAT ORGANISED CRIME

Interfax on 5th February reported that the National Police of Ukraine have agreed to create a new unit to combat organised crime, the completion of the formation is expected before the end of the year

http://en.interfax.com.ua/news/general/482478.html

GIBRALTAR COMMITTED TO COMPLIANCE POST-BREXIT

On 5th February, the Gibraltar Chronicle reported that Gibraltar will not embark on a “bonfire of regulations” as it prepares to leave the European Union, according to the Chief Minister who also said that the “digital generation” was ready for post-Brexit trade with the world.  He made the comments while addressing a City forum of insurance professionals during a visit to London.

http://chronicle.gi/2018/02/gib-committed-to-regulatory-compliance-and-digital-trade-post-brexit-picardo-says/

NORTH KOREAN FERRY NEEDS APPROVAL FROM SEOUL TO SAIL TO SOUTH

The Yonhap News Agency in South Korea tells the story of the 9,700-ton North Korean ferry Mangyongbong-92 which is set to carry a North Korean art troupe across the inter-Korean border for the 2018 PyeongChang Winter Olympics in South Korea, having been cleared of questions over whether it would violate international sanctions.  However, it needs an exemption from South Korean sanctions in order to enter a South Korean port, while Seoul said it is ready to approve.  The vessel’s South Korean trip runs counter to the South’s blanket ban, imposed in 2010, on inter-Korean exchanges and transactions, according to government officials, and imposed in retaliation for the North’s torpedoing of a South Korean Navy Corvette in March 2010.

http://english.yonhapnews.co.kr/northkorea/2018/02/05/70/0401000000AEN20180205009000315F.html

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ACCUSED VISA FRAUD ORGANIZER REACHES $84 MILLION SEC SETTLEMENT

The Daily Business Review reports that a Miami businessman has reached an $84 million settlement with the SEC after he was accused of organizing ​an EB-5 visa fraud by recruiting investment in development at Vermont’s Jay Peak ski resort. The agreement covers $50 million in investor funds that Jay Peak-owner Ariel Quiros was accused of misdirecting to his personal use and $30 million held back from 2 Jay Peak construction projects, which jeopardised visa eligibility for as many at 700 investors from 74 countries.  Under the EB-5 programme, foreign investors are entitled to US visas for them and their immediate family when they put $500,000 into rural areas like northern Vermont and $1 million in other areas where at least 10 new jobs are created. https://www.law.com/dailybusinessreview/sites/dailybusinessreview/2018/02/02/%E2%80%8Baccused-eb-5-visa-fraud-organizer-reaches-84-million-sec-settlement/?kw=Accused%20EB-5%20Visa%20Fraud%20Organizer%20Reaches%20%2484%20Million%20SEC%20Settlement&et=editorial&bu=Daily%20Business%20Review&cn=20180205&src=EMC-Email&pt=E-Review

HMRC MONEY LAUNDERING SUPERVISION: ENFORCEMENT MEASURES

On 5th February, HMRC issued updated guidance about its approach to enforcement of AML/CFT controls.

https://www.gov.uk/government/publications/money-laundering-supervision-enforcement-measures

EX-FORMULA 1 BOSS BERNIE ECCLESTONE “QUESTIONED UNDER CAUTION BY HMRC”
The Daily Mail reported on 4th February that former Formula 1 racing chief Bernie Ecclestone has been questioned as authorities intensified scrutiny in a £1 billion probe, it has emerged.  It says that the 87-year-old was reportedly quizzed under caution by HMRC at a police station in central London.  He was allegedly quizzed over his £2.5 billion empire.

http://www.dailymail.co.uk/news/article-5349145/Bernie-Ecclestone-questioned-caution-HMRC.html#ixzz56FaaddZS

ANOTHER OIL TANKER MISSING IN GULF OF GUINEA

Defence Web reports that a second oil tanker has gone missing in the Gulf of Guinea, weeks after a tanker was hijacked off Nigeria and subsequently released, in a potential uptick in regional piracy.  Contact with the Marine Express, managed by Hong Kong-based Anglo-Eastern, was lost on 2nd February, carrying 22 Indian crew and 13,500 tons of gasoline, and was last seen in Benin’s waters.

www.defenceweb.co.za/index.php?option=com_content&view=article&id=50601:another-oil-tanker-missing-in-gulf-of-guinea&catid=108:maritime-security&Itemid=233

INDIAN BILLIONAIRE JEWELLER INVESTIGATED OVER BANK FRAUD

On 5th February, Reuters reported that Indian federal agents said that they had launched an investigation into billionaire jeweller Nirav Modi, one of the country’s richest men, over accusations that he and others defrauded a state bank of $44 million.  The Central Bureau of Investigation (CBI) said it was acting on a complaint from the Punjab National Bank that Modi and others had conspired with bank officials to fraudulently obtain advances for making payments to overseas suppliers.

https://www.reuters.com/article/india-billionaire/indian-billionaire-jeweller-investigated-over-bank-fraud-idUSL4N1PV4G5?src=ilaw

UK AMENDS LYNN S DETAILS UNDER LIBYAN SANCTIONS

On 5th February, HM Treasury issued a Notice advising of amendment of the details of the vessel, Lynn S, subject to Libyan sanctions.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/679274/2018.166_Libya.pdf

SEARCHING FOR THE OWNER OF UNREGISTERED LAND

On 5th February the UK Gov blog carried an entry from HM Land Registry on obtaining information about unregistered land in England & Wales.

https://hmlandregistry.blog.gov.uk/2018/02/05/search-owner-unregistered-land/

UK ADDS 3 NAMES TO SOUTH SUDAN SANCTIONS LIST

On 5th February, HM Treasury published a Notice advising that 3 new names had been added to its South Sudan sanctions list –

LEUTH, Michael, Makuei (Group ID: 13610); MALONG, Paul (Group ID: 13609); and RIAK, Malek, Reuben (Group ID: 13611).

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/679277/2018_164_South_Sudan.pdf

£5 MILLION APPRENTICESHIP FRAUD RUN BY FORMER FOOTBALLERS

The Belfast Telegraph reported on 5th February that ex-footballers Mark Aizlewood and Paul Sugrue embezzled £5 million of public money reserved to train vulnerable young people. The pair, who have been found guilty of fraud, ran a company, Luis Michael Training Ltd (LMT), which claimed to provide apprenticeships in football coaching which they claimed included training, work experience and payment of £95 per week.  In total, the scheme took £5 million of money from the government-run Skills Funding Agency, set up to train young people.

https://www.belfasttelegraph.co.uk/news/uk/the-5m-apprenticeship-fraud-run-by-former-footballers-aizlewood-and-sugrue-36569575.html

SAFEGUARDING BRITAIN’S NUCLEAR NON-PROLIFERATION OBLIGATIONS AFTER BREXIT

On 5th February, RUSI published an article about the Nuclear Safeguards Bill.  The UK departure from the EU in March 2019 will have an impact on safeguards at civil nuclear facilities, and to provide the legal basis for a new safeguards system after Brexit the Nuclear Safeguards Bill is currently undergoing parliamentary scrutiny.  The articles refers to empowerment of the Office for Nuclear Regulation (ONR) – an existing, independent statutory body – and the conclusion of a new safeguards agreement with the IAEA.

https://rusi.org/commentary/safeguarding-britain’s-nuclear-non-proliferation-obligations-after-brexit

DARK WEB FENTYNYL SUPPLIER JAILED IN UK

An NCA news release on 5th February reported that Kyle Enos, 25, from Gwent, boasted he could arrange for a highly toxic synthetic opioid, fentynyl, to be shipped anywhere in the world the same day as receiving an order.  He used the Dark Web to advertise his business of selling bespoke packages of fentanyl, and such was his customer service, he also promised that if any packages were seized by customs, he would refund them or “re-ship the order again completely free”.  He has now been jailed for 8 years.

http://www.nationalcrimeagency.gov.uk/news/1284-my-priority-is-your-satisfaction-we-ll-find-the-perfect-custom-concentration-for-you

DATA-HACKING TOOL TAKEN OUT OF CIRCULATION

On 5th February, the NCA reported that a cyber-hacking tool that allowed criminals to take full control of victims’ machines is no longer available after an operation co-ordinated by the NCA.  The Luminosity Link RAT (a Remote Access Trojan) enabled hackers to connect to a victim’s machine undetected.  They could then disable anti-virus and anti-malware software, carry out commands such as monitoring and recording keystrokes, steal data and passwords, and watch victims via their webcams.  The RAT cost as little as £30 and users needed little technical knowledge to deploy it.  A small network of UK individuals supported the distribution and use of the RAT across 78 countries and sold it to more than 8,600 buyers via a website dedicated to hacking and the use of criminal malware.

http://www.nationalcrimeagency.gov.uk/news/1283-data-stealing-hacking-tool-taken-out-of-use

See also Europol news release – International crackdown on anti-spyware malware

https://www.europol.europa.eu/newsroom/news/international-crackdown-anti-spyware-malware

CRIMINALS SMUGGLING GOLD INTO JAPAN CONCEALED BARS IN AIRLINER TOILETS AS GANGS GROW MORE SOPHISTICATED IN THEIR TACTICS

Customs Today reports that Japanese authorities have warned international gold smuggling rings are becoming more sophisticated after cracking a scheme to conceal gold bars in aircraft toilets. Police in Nagoya have arrested 6 people in connection with the latest in a growing number of smuggling attempts. The men were accused of illegally importing 5 gold bars on a Japan Airlines flight from Taiwan to Nagoya’s Chubu Airport in July 2017.

http://www.customstoday.com.pk/criminals-smuggling-gold-into-japan-concealed-bars-in-aeroplane-toilets-as-gangs-grow-more-sophisticated-in-their-tactics/

VLADIMIR KOKOREV UPDATE

On 5th February, Kenneth Rijock in his blog reported that Vladimir Kokorev  (65), a Spanish entrepreneur of Russian-Jewish origins, who in 2015 was arrested and put in pre-trial detention together with his wife Yulia (67) and son Igor (35), had been released to house arrest. No charges have yet been laid.  He and his family had been detained on the orders of Spanish Judge , and the family have spent over 2 years in prison on Canary Islands without a trial, a formal indictment, nor any evidence of wrongdoing and with the case declared “secret” by the Judge de Vega for 18 months while the family remained in prison.

http://rijock.blogspot.com/

HBOS FRAUD REVIEW BULKS UP TEAM AS IT AIMS TO FINISH PROBE

Law 360 on 5th February reports that an independent team reviewing Lloyds Banking Group PLC’s handling of a £245 million fraud and assess whether Lloyds adequately investigated fraud involving former employees at HBOS and reported it to the authorities at its subsidiary HBOS PLC has hired 5 barristers as it gears up to deliver its findings by the end of 2018.
https://www.law360.com/articles/1008905

UK HIRES 5 ADDITIONAL TREASURY LAWYERS TO PROSECUTE MAJOR CRIME

On 5th February, Law 360 reported that the UK Attorney General announced the appointment of 5 new members to the Treasury’s counsel team, where they will be responsible for prosecuting some of the most serious crimes in Britain.  He said that veterans from the SFO have been added to the team, which handles major corruption cases and serious and organised crime in addition to high-profile murder and terrorism prosecutions.

https://www.law360.com/articles/1008891

DEFINING REMOTE CYBER WARFARE

On 5th February, VERTIC reported that the Remote Warfare Programme, part of the Oxford Research Group, has recently released a briefing paper which attends to cyberwar and investigates how cyber could fit into traditional understandings of military doctrine and strategy.  It discusses the treatment of cyber in the military doctrines of the permanent members of the UN Security Council. It then examines the opportunities and barriers posed by the integration of cyber capabilities into national deterrence strategies.

https://remotecontrolproject.org/publications/defining-remote-warfare-cyber/

ACCUSED UK COMPUTER HACKER WINS APPEAL AGAINST EXTRADITION TO US

Jurist on 5th February reported that accused computer hacker, British student Lauri Love, had won an appeal preventing his extradition to the US.  He is accused of hacking into US government websites in 2013, along with other unnamed co-conspirators, and stealing huge amounts of data. He argued that as he suffers from Asperger’s, anxiety and depression the extradition would cause him to commit self-bodily harm and that there was no reason UK courts were not legally sufficient.

http://www.jurist.org/paperchase/2018/02/accused-uk-computer-hacker-wins-appeal-against-extradition-to-us.php

See also Corker Binning briefing at –

https://www.corkerbinning.com/will-love-change-everything-extradition-and-the-forum-bar/

NEW UK LAW TO PROHIBIT BETTING ON EUROMILLIONS DRAWS TO COME INTO FORCE IN APRIL

On 5th February, Out-Law reminds one that new laws to prohibit gambling operators from accepting bets from consumers in Britain on the outcome of EuroMillions draws taking place outside of the UK will come into force on 6th April.

https://www.out-law.com/en/articles/2018/february/new-laws-to-prohibit-betting-on-euromillions-draws-to-come-into-force-in-april/

PAKISTAN CONTACTS POLAND TO DETECT SUSPECTS BEHIND SMUGGLING OF ACETIC ANHYDRIDE

Customs Today reports that Pakistan customs has approached the officials of Poland to seek assistance to trace out the actual culprits involved in the smuggling of dual purpose chemical acetic anhydride which is used to make heroine, explosives and bombs.  The consignment was shipped from Poland under description of “summer fluid” which is used in manufacturing of shampoos, adding that irrelevant description was used to hoodwink the customs authorities in order to get the consignment cleared from port. The value of the consignment has been reported as $1.5 million.  Acetic anhydride is importable only by authorised industrial consumers.

http://www.customstoday.com.pk/customs-port-qasim-seeks-help-of-polish-authorities-to-trace-culprits-involved-in-smuggling-of-acetic-anhydride/

CHINESE NATIONAL AND 3 OTHERS PLEAD GUILTY IN APPLE COUNTERFEITING SCHEME

Gizmodo on 5th February reported that a Chinese national who was living in the US on a student visa pleaded guilty to charges of trafficking in counterfeit goods and conspiracy over a plot to sell Chinese-made Apple fakes to US customers.  A DoJ news release claims 43-year-old Jianhua “Jeff” Li’s company, Dream Digitals, conspired with at least 3 others to smuggle over 40,000 Chinese-made “electronic devices and accessories, including iPads and iPhones, along with labels and packaging bearing counterfeit Apple trademarks.

https://www.gizmodo.com.au/2018/02/chinese-national-three-others-plead-guilty-in-apple-counterfeiting-scheme/

HIGH COURT: LEGAL PRIVILEGE CAN APPLY TO INTERNAL INVESTIGATIONS ON THE RIGHT SET OF FACTS

On 5th February, law news site Out-Law reported that the High Court has confirmed that legal privilege can apply to investigations on the right set of facts, restoring some certainty to a position that has been up for debate since May 2017.   It says that the decision in Bilta & Ors v RBS & Anor also serves as a reminder that large companies seeking to launch an investigation should seek specialist legal advice at the earliest opportunity.  The fact that RBS had instructed a specialist tax litigation team at the outset to lead the investigation was one of 3 factors that led to the judge finding in favour of the bank.

https://www.out-law.com/en/articles/2018/february/high-court-legal-privilege-can-apply-to-internal-investigations-on-the-right-set-of-facts/

TOP 4 RISKS FOR BUSINESSES IN RUSSIA FOR 2018

In its Russia/CIS Riskwatch newsletter, Control risks identified the 4 top business risks for Russia in 2018 – terrorism; the expansion of US sanctions; the escalation of elite in-fighting to further erode corporate governance and increase investor risks; and popular protests (in what is an election year).

https://www.controlrisks.com/our-thinking/insights/newsletters/russia-issue-13-february-2018/welcome-top-4-risks

 VENEZUELA: FORMER PDVSA EXECUTIVES ACCUSED OF SIPHONING OFF $60M

On 5th February, Baker McKenzie reported that 3 former directors of state-owned oil company Petroleos de Venezuela SA (PDVSA) allegedly transferred $60 million to offshore accounts in Andorra between 2008 and 2014, El Pais reports.  The newspaper claims that transactions were made under the names of ex-subsidiary director Luis Carlos Leon Perez; former PDVSA Director Eudomario Carruyo, and Francisco Antonio Jimenez, former president of Bariven – a PDVSA subsidiary.

http://www.riskandcompliancehub.com/venezuela-former-pdvsa-execs-accused-of-siphoning-off-us60m/

ABILITY OF FOREIGN FIGHTERS TO ENTER EUROPE UNDETECTED INDICATES HEIGHTENED RISK OF MULTI-SITE MASS-CASUALTY ATTACKS IN 2018

Janes.com on 5th February reported that, according to the Guardian, Interpol had circulated a list of 50 Tunisian suspected Islamic State foreign fighters who had arrived recently in Italy, some of whom may be intending to travel on to other European countries. It goes on to say that suspected Islamic State fighters are thought to have arrived on small vessels, on a beach near Agrigento in Sicily.  The Interpol list of suspects was originally sent to Italy’s interior ministry,

www.janes.com/article/77596/ability-of-foreign-fighters-to-enter-europe-undetected-indicates-heightened-risk-of-multi-site-mass-casualty-attacks-in-2018

THE TRUE STORY OF HOW THE US COAST GUARD AND NAVY TOOK DOWN THE HEAD OF THE CUBAN MAFIA

The Task & Purpose website carries this story of how, in 2004, the US seized Jose Miguel Battle Senior and Junior. The article explains that Battle Jr ran La Corporación, a powerful criminal organisation in cahoots with the Italian mob that started in New York and New Jersey, then later expanded to Miami. The elder Battle, a CIA-trained Cuban exile, was a former police officer under deposed dictator Batista and was a part of 2506 Brigade that participated in the failed Bay of Pigs Invasion.  Following his capture and subsequent release by Fidel Castro’s men, he entered organised crime and built a syndicate from illegal gambling operations known as bolitas, or little balls, which are essentially numbers games. The father died in custody, but the son was released on probation in Miami in 2017.

https://taskandpurpose.com/true-story-coast-guard-took-head-cuban-mafia/

DIFFERING CRIMINAL PENALTIES FOR FAKE MEDICINES IN THE EU RAISE CONCERNS

On 5th February, In-Pharma carries an article concerned with a recent EU report on the divergent criminal penalties for production and sale of counterfeit medicines.

https://www.in-pharmatechnologist.com/Article/2018/02/05/Fake-meds-on-trial-EU-report-weighs-up-Member-State-punishment

 ICIJ ARTICLE ON THE RECENT US LIST OF RUSSIANS WHO MAY BE SUBJECT TO FUTURE SANCTIONS

On 5th February the ICIJ website carried an article about the list of wealthy Russians with close ties to the government of Vladimir Putin, and intended to help policymakers decide on a new round of sanctions against Russia for both the country’s meddling in the US presidential election and its annexation of Crimea.  It said that, in response to questions from ICIJ about its oligarch list, the US Treasury responded with a press release stating that, while the list it released was drawn from publicly available sources, it was submitted to congress with “classified annexes” that contained additional information. The Panama Papers and Paradise Papers drew attention to Russian oligarchs’ connections to both American interests and tax havens around the world, underscoring the sensitivity for the Trump Administration of compiling an Oligarch sanctions list with any bite, the article says.

https://www.icij.org/blog/2018/02/the-u-s-list-of-wealthy-russians-and-our-offshore-investigations/

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MONEY LAUNDERING: PHILIPPINE SENATOR SEEKS LEGISLATIVE PROBE OF DUTERTE’S TRANSACTIONS

On 5th February, KYC 360 reported that a Philippine senator and staunch critic of President Rodrigo Duterte filed a resolution seeking a legislative inquiry into whether Duterte and his eldest daughter had concealed assets amounting to almost $2 million.

https://kyc360.com/news/money-laundering-senator-seeks-probe-philippine-president-dutertes-transactions/

IMPLEMENTING THE 2020 SULPHUR LIMIT

On 5th February, the International Maritime Organisation published an article about the 0.50% limit on sulphur in fuel oil on board ships (outside designated emission control areas) will come into effect on 1st January 2020, with a meeting being held at IMO HQ in London.

http://www.imo.org/en/MediaCentre/WhatsNew/Pages/default.aspx

http://www.imo.org/en/MediaCentre/HotTopics/Pages/Sulphur-2020.aspx

CHINA LAUNCHES THE POLAR SILK ROAD

On 2nd February, the Center for Strategic & International Studies published an article about a 28th January white paper from the State Council Information Office in China detailing the country’s official Arctic policy for the first time.  The document plotted the course for future Chinese development goals in the region — including scientific, commercial, environmental preservation, and resource extraction efforts — and aligned Chinese Arctic interests with the Belt and Road Initiative.  In 2017, the research vessel Xue Long became the first Chinese ship to navigate the 3 major Arctic shipping routes: The Northwest Passage, Northeast Passage, and Transpolar Sea Route.

https://www.csis.org/analysis/china-launches-polar-silk-road

ISLE OF MAN GUIDANCE IN RESPECT OF REGULATED ENTITIES UNDERTAKING CRIMINAL RECORDS CHECKS

On 5th February, the Isle of Man Financial Services Authority has updated its guidance in respect of regulated entities undertaking criminal records checks.  The guidance is intended to provide additional clarity around how a regulated entity, or an applicant to become a regulated entity, may undertake criminal records checks on its controllers and key persons.

https://www.iomfsa.im/fsa-news/2018/feb/guidance-updated-in-respect-of-regulated-entities-undertaking-criminal-records-checks/

PROOF OF CHEMICAL WEAPONS USE IN SYRIA SHOULD BE MET WITH ‘MEANINGFUL RESPONSE,’ UN DISARMAMENT CHIEF

On 5th February, the UN News service reported that evidence of the use, or likely use, of banned chemical weapons in Syria should be met with a “meaningful response” within the UN Security Council, the UN disarmament affairs chief said, when briefing the Council on the work being undertaken by the UN and the Organization for the Prohibition of Chemical Weapons (OPCW) Fact Finding Mission (FFM) to look into all allegations of the use of chemical weapons in Syria.

http://www.un.org/apps/news/story.asp?NewsID=58533#.Wni4Bkx2ucw

UNDERSTANDING RUSSIA’S APPETITE FOR URANIUM

On 5th February, the Intersection website carried an article saying that Russia is quietly competing with China for influence over global nuclear energy production, whether that means jostling for nuclear plant construction contracts, or securing access to uranium extraction in Central AsiaRussia is the third0-largest consumer of uranium, and the country aims to be a key driver of growth in uranium markets over the next few years.  Amongst the matters mentioned are the China-Russia rivalry in Central Asia, the privatisation of Kazakhstan’s state-owned Kazattomprom, and the small number of players in uranium production with its limited market, and Beijing and Moscow’s status as the key drivers of demand growth, mean that competition for market share may well be contentious.  The article mentioned that 39% of global supplies are mined in Kazakhstan, while another 4.8% is mined in Russia. Canada and Australia are also notable producers, responsible for 22% and 10%, respectively.

http://intersectionproject.eu/article/economy/understanding-russias-appetite-uranium

US TREASURY SANCTIONS INDIVIDUALS DESTABILISING THE EASTERN DRC

On 5th February, OFAC sanctioned 4 individuals who have engaged in destabilising activities responsible for prolonging the conflict in the Democratic Republic of Congo (DRC) and contributing to widespread poverty, chronic food insecurity, and population displacement.

  • Muhindo Akili Mundos (Mundos)
  • Gédéon Kyungu Mutanga (Gédéon)
  • Guidon Shimiray Mwissa (Mwissa)
  • Lucien Nzabamwita (Nzabamwita)

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180205.aspx

https://home.treasury.gov/news/press-release/sm0279

VLADIMIR’S VENEZUELA – LEVERAGING LOANS TO CARACAS, MOSCOW SNAPS UP OIL ASSETS

A Special Report from Reuters on 5th February is concerned with Venezuela’s unraveling socialist government which is increasingly turning to ally Russia for the cash and credit it needs to survive – and offering prized state-owned oil assets in return.  It claims that Venezuela’s state-owned oil firm, Petroleos de Venezuela (PDVSA), has been secretly negotiating since at least early this year with Russia’s biggest state-owned oil company, Rosneft, offering ownership interests in up to 9 of Venezuela’s most productive petroleum projects.  Rosneft currently owns substantial portions of 5 existing PDVSA oil projects.

https://www.reuters.com/article/us-venezuela-russia-oil-specialreport/special-report-vladimirs-venezuela-leveraging-loans-to-caracas-moscow-snaps-up-oil-assets-idUSKBN1AR14U

FAMILIES SETTLE WITH CHIQUITA OVER DEATHS OF AMERICANS IN COLOMBIA

On 5th February, the Daily Business Review reports that families of 6 Americans kidnapped and killed in Colombia during the 1990s by FARC settled before the scheduled start of jury selection in West Palm Beach federal court.  The families were seeking potentially tens of millions of dollars in damages from the banana giant because of payments the company made to the group.  Chiquita has admitted paying FARC about $220,000 but insists it did so only to protect its employees and interests from violence.

https://www.law.com/dailybusinessreview/sites/dailybusinessreview/2018/02/05/families-sue-chiquita-over-deaths-of-americans-in-colombia/?et=editorial&bu=Daily%20Business%20Review&cn=20180205&src=EMC-Email&pt=Breaking%20News

US TREASURY SANCTIONS INDIVIDUALS DESTABILISING THE EASTERN DRC

On 5th February, OFAC sanctioned 4 individuals who have engaged in destabilising activities responsible for prolonging the conflict in the Democratic Republic of Congo (DRC) and contributing to widespread poverty, chronic food insecurity, and population displacement.

  • Muhindo Akili Mundos (Mundos)
  • Gédéon Kyungu Mutanga (Gédéon)
  • Guidon Shimiray Mwissa (Mwissa)
  • Lucien Nzabamwita (Nzabamwita)

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180205.aspx

https://home.treasury.gov/news/press-release/sm0279

UK ADDS 3 NAMES TO SOUTH SUDAN SANCTIONS LIST

On 5th February, HM Treasury published a Notice advising that 3 new names had been added to its South Sudan sanctions list –

LEUTH, Michael, Makuei (Group ID: 13610); MALONG, Paul (Group ID: 13609); and RIAK, Malek, Reuben (Group ID: 13611).

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/679277/2018_164_South_Sudan.pdf

THINGS YOU MAY HAVE MISSED – FEBRUARY 4

4th February 2018

CHEMICAL WEAPONS RESURFACE IN SYRIA

Reliefweb on 2nd February carried an article from Human Rights Watch saying that reports had been received from residents in Eastern Ghouta in Syria of chlorine being used in a ground attack on Douma.  It was not the first time the besieged town suffered a chemical weapons attack.  Almost 5 years ago, on August 21st 2013, a chemical attack had killed hundreds of civilians, many of them children.  It was the first wide-scale use of chemical weapons in decades.  The likely culprit was the Syrian government.  Only a day after the January 22nd attack, France launched a political initiative to combat the proliferation of chemical weapons and ensure that using them has consequences for those who do so.  Aptly called ‘No Impunity’, the initiators also imposed sanctions against individuals and businesses with links to Syria’s chemical weapons program.  The author says that the UN Security Council and the Organization for the Prohibition of Chemical Weapons should renew the investigative mechanism, or find an alternative.  There is, the author say, no substitute for UN Security Council action.

https://reliefweb.int/report/syrian-arab-republic/chemical-weapons-resurface-syria

HOW DID AN IRISH TECH BOSS WIND UP BEING HELD IN SWITZERLAND ON SUSPICION OF WITHHOLDING €3.8 MILLION OF CHARITY DONATIONS?

On 4th February the Sunday times carried an article about Irish businessman Peter Conlon, who had relocated to Switzerland from Dublin about 6 years ago.  His latest venture, Ammado, developed technology to process online charity donations, and the Swiss base put him close to the headquarters of many global charities, including the International Federation of the Red Cross (IFRC).  The Irish Independent reports that Ireland’s corporate watchdog ODCE is poised to investigate the online donations platform said to owe €3.8million to charities.  Ammado’s website was shut down and visitors to the site are now referred to the liquidator.  It was reported that 2 major international charities are reportedly owed more than €500,000 – the refugee agency, the UNHCR, is owed just over €400,000 and Save the Children UK is owed €118,000.  Peter Conlon is now in custody in Switzerland where he was arrested on suspicion of embezzling money from the company, which developed technology to facilitate online donations. He was arrested after the International Federation of the Red Cross filed a criminal complaint against Ammado and Conlon, claiming it is owed €1.55 million in donations.

https://www.independent.ie/irish-news/watchdog-to-join-38m-charity-probe-36564640.html

QADDAFI’S LONG GONE, BUT LIBYA’S OIL STILL STRUGGLES

On 4th February Bloomberg reported that theft, corruption and injustice are getting dangerously close to strangling the newly reborn Libyan oil industry.  It says that, on the face of it, the National Oil Company had a good year in 2017, building on its successes of late 2016. The country’s production tripled between the third quarter of 2016 and the last 3 months of 2017 – a feat few thought possible.  But it still has a long way to go to get back to where it was before Qaddafi was toppled in 2011. And the recovery is at risk.

https://www.bloomberg.com/gadfly/articles/2018-02-04/qaddafi-s-long-gone-but-libya-s-oil-still-struggles?src=ilaw

RECORD YEAR IN THE FIGHT AGAINST FRAUD FOR THE SPECIAL TAX INSPECTION TEAM IN BELGIUM

The Brussels Times says that the Belgian Special Tax Inspection Team recuperated a record €2.1 billion last year, reports L’Echo and De Tijd.  The Special Tax Inspection Team (ISI) has severely cracked down on tax fraud and issued fines and tax increases worth a record €2.1 billion.  That’s around €400 million more than in 2016 and double the figure for 2015.

www.brusselstimes.com/belgium/10228/record-year-in-the-fight-against-fraud-for-the-special-tax-inspection-team?src=ilaw

CONCERN OVER INCREASING NUMBER OF OFFICIALS FACING CRIMINAL OFFENCES IN SOUTH AFRICA

IOL in South Africa reports that the acting national head of the Directorate for Priority Crime Investigation (Hawks) has expressed concern about the alarming rate at which public officials are continually being found to be in conflict with the law.  From November 1st to date, about 92 officials from different government entities across all the provinces had been arrested by the Hawks’ serious corruption crime units for various offences, including corruption, armed robbery, and theft, she said in a statement.  “The breakdown of the perpetrators comprises, among others, 28 police officers, 45 traffic officers, 6 home affairs and other government officials, including municipalities. A staggering 34 traffic officers out of 45 are from Limpopo alone”, he said.

https://www.iol.co.za/news/crime-courts/concern-over-increasing-number-of-officials-facing-criminal-offences-13092528?src=ilaw

INDIA: BRIBERY RACKET, CBI ARRESTS GST COMMISSIONER, 8 OTHERS FOR AIDING TAX EVASION

Business Standard in India reports that the CBI has arrested a Goods and Services Tax commissioner from Kanpur and 8 others, including 3 officials, as part of an alleged bribery racket in the department.  The officials used to collect regular bribes from businessmen and industrialists of Kanpur for providing them tax-related relief and shielding them from notices of the department, the sources said.  The bribes were collected either in the form of cash or costly items like refrigerators, TV sets, and mobile phones which were delivered to the Commissioner’s residence in New Delhi, they said.

http://www.business-standard.com/article/current-affairs/bribery-racket-cbi-nabs-gst-commissioner-8-others-for-aiding-tax-evasion-118020300851_1.html?src=ilaw

4 SUSPECTS, INCLUDING TEL AVIV DEPUTY MAYOR, DETAINED IN GRAFT PROBE

The Times of Israel on 4th February reported that 4 suspects were detained and taken in for questioning under caution for their suspected involvement in a corruption affair encompassing officials from the Rishon Lezion and Tel Aviv municipalities as well as former coalition whip.  Among whom are a deputy mayor of Tel Aviv, Arnon Giladi, and an activist for the ruling Likud party, suspected of involvement in bribery, money laundering and tax offences in the probe, known as Case 1803.  The suspects are connected to 3 housing projects in Tel Aviv in which corruption is alleged.  In December, some 20 employees of the Rishon Lezion municipality were arrested as part of the probe, including mayor, Dov Zur.  Among those detained by police after a long investigation were also 2 parliamentary aides, contractors and businesspeople.

https://www.timesofisrael.com/4-suspects-including-tel-aviv-deputy-mayor-detained-in-bitan-graft-probe/?src=ilaw

UN EXPERTS: NORTH KOREA IS SKIRTING SANCTIONS

On 3rd February, CTV News in Canada carried a further article on the recent UN Panel of Experts report on North Korean sanctions implementation.  This article highlighted the fact that the experts also cited “critical deficiencies” in implementing financial sanctions, saying that North Korean financial institutions, including banks which have been sanctions by the council, “maintain more than 30 overseas representatives who live and move freely across borders in the Middle East and Asia, where they control bank accounts, facilitate transactions and deal in bulk cash,” the report said.  The experts said North Korea is also exploiting “a key vulnerability” which has enabled the country “to easily create front companies offshore in Asian financial centres where they leverage assistance” from other nationals and use the firms to open accounts and move money worldwide.  The panel said its investigations highlight the activity of intelligence agents and other individuals acting on behalf of sanctioned North Korean entities who operate bank accounts in Europe and the Asia-Pacific “and use diplomatic passports and diplomatic-plated cars to cross land and air borders with less scrutiny.”

https://www.ctvnews.ca/world/un-experts-north-korea-is-skirting-sanctions-1.3788276?src=ilaw

IRISH COMPLIANCE AGENDA NEWSLETTER: FEBRUARY 2018

Irish law firm LK Shields has issued its latest quarterly newsletter Compliance Agenda. It contains a round-up of all the latest legal updates of interest to Company Secretaries, Company Directors and Compliance Officers.  This edition includes – the launch of the Central Register of Beneficial Ownership; the recent action against hundreds of directors of struck-off companies;  the Companies (Statutory Audits) Bill which transposes discretionary elements of the EU Audit Directive 2014/56/EU; and the GDPR.

https://www.lkshields.ie/news-insights/publication/compliance-agenda-february-2018

ENGLISH COUNCIL CLAIMS LEGAL FIRST IN USE OF POCA FOR SAFETY AND AMENITY REGULATION OFFENCES

The Local Government Lawyer website reports that the London Borough of Brent said that it has become the first council in the country to use the Proceeds of Crime Act 2002 (POCA) against landlords for criminal offences linked to safety and amenity regulations.  POCA could be used to recover criminal assets that the Shah family “obtained from cramming 31 tenants into filthy and dangerous living conditions”.  Harsha Shah, daughter Chandni Shah and brother-in-law Sanjay Shah faced paying a confiscation order for financial benefit gained or saved as result of contraventions of the Management of HMO Regulations 2006 and breaches of licensing conditions. The sums could amount to hundreds of thousands of pounds.

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=34027%3Acouncil-claims-legal-first-in-use-of-poca-for-safety-and-amenity-regulation-offences&catid=60&Itemid=28

SAUDI NUCLEAR TALKS: RISKS AND LIMITATIONS

On 31st January, the Washington Institute published a reports saying that allowing Riyadh to produce its own nuclear fuel could have bad proliferation consequences in the Middle East and Asia, but Washington may not have the leverage to enforce a permanent ban.  Like Tehran, Riyadh wants the right to produce nuclear fuel on its soil by enriching uranium and reprocessing plutonium from spent reactor fuel.  Some officials involved in Riyadh’s emerging nuclear plans believe Washington might soften its position on Saudi uranium enrichment in order to bolster President Trump’s pledge about rejuvenating the US nuclear industry. Yet doing so risks setting a precedent that other regional states could follow, including Turkey, Jordan, Egypt, and UAE — all of which have announced their intentions to develop nuclear power in recent years. In December, Saudi Arabia invited 5 companies to prepare bids for its first wave of reactor projects, according to participants in the process, including Westinghouse Electric, JSC Rusatom (a subsidiary of Russia’s state-owned nuclear giant Rosatom), France’s EDF Group, the China Nuclear Engineering Corporation, and the Korea Electric Power Corporation. The article argues that US nuclear policies toward Iran and Saudi Arabia are now inextricably linked and coming to a head.

http://www.washingtoninstitute.org/policy-analysis/view/saudi-nuclear-talks-risks-and-limitations

CRYPTOCURRENCY SCAMS ON TWITTER ARE SO COMMON, THIS GUY BUILT A TOOL TO HELP DETECT FRAUDSTERS

Business Insider UK carried an article saying that Harry Denley’s script, EtherSecurityLookup, runs as a browser extension on Google Chrome.   The extension catches Twitter accounts that impersonate established users or companies.  In the crypto community, this is usually done to plug fraudulent projects, or just straight up ask strangers to send them money.

http://uk.businessinsider.com/this-ethereum-enthusiast-is-releasing-a-chrome-extension-to-catch-fake-twitter-accounts-2018-2

TORY DONOR ACCUSED OF STASHING CASH IN TAX HAVENS POSTS GLOATING PHOTO OF HIM READING “PANAMA PAPERS”

On 4th February, the Mirror reports that Lord Michael Ashcroft, the millionaire Tory donor accused of stashing cash in tax havens while he sat in the House of Lords, has posted a gloating picture of himself reading the ‘Panama papers’.  The Tory peer tweeted a picture of himself, in Panama, with the country’s former Foreign Minister, Samuel Lewis, holding up a local newspaper – literally a ‘Panama Paper.’

https://www.mirror.co.uk/news/politics/tory-donor-accused-stashing-cash-11968449

HEDGE FUNDER “LIED ABOUT CREDENTIALS, CRIMINAL PAST”

Law 360 reports that Nicholas J. Genovese, 52, a New York hedge fund manager illegally raised at least $4 million from investors by lying about his professional background, allegedly saying he once worked in top positions at both Goldman Sachs and Bear Stearns, and by concealing an extensive criminal history, federal prosecutors said.  He is charged with securities and wire fraud for soliciting investments in the hedge fund he founded, Willow Creek Investments, from 2015.

https://www.law360.com/articles/1008649

IRAN UN CONSULTANT GETS 3 MONTHS FOR TAX, SANCTIONS CRIMES

A researcher for Iran’s mission to the UN, Ahmad Sheikhzadeh, 61, a US citizen who pleaded guilty to tax evasion and sanctions violations was sentenced by a Brooklyn federal judge to 3 months in prison after he testified at length to rebut prosecutors’ insinuations that he worked for Iranian intelligence.  He had faced a sentence in the 4- to 5-year range under sentencing guidelines.

https://www.law360.com/articles/1008850

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THINGS YOU MAY HAVE MISSED – FEBRUARY 3

3rd February 2018

EU REGULATIONS CONFIRM 3 NAMES ADDED TO SOUTH SUDAN SANCTIONS

On 3rd February, EU Regulation 2018/164/EU confirmed the below.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.031.01.0001.01.ENG&toc=OJ:L:2018:031:TOC

See also EU Council Decision 2018/168/CFSP –

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.031.01.0086.01.ENG&toc=OJ:L:2018:031:TOC

The European Council has added 3 persons involved in serious human rights violations to the list of those submitted to a travel ban and an asset freeze in view of the situation in South Sudan.  It is the first time that the EU decides to sanction persons in view of the situation in South Sudan in addition to those sanctioned by the UN. The decision brings the total number of persons under restrictive measures in view of the situation in South Sudan to 9, as 6 persons were already listed by the UN.  The 3 new names are – Paul Malong, Malek Reuben Riak and Michael Makuei Leuth

http://www.consilium.europa.eu/en/press/press-releases/2018/02/02/south-sudan-eu-adds-3-persons-involved-in-serious-human-rights-violation-to-sanctions-list/

https://www.gov.uk/government/news/minister-for-africa-welcomes-new-eu-sanctions-against-south-sudan

EU AMENDS DETAILS OF LYNN S VESSEL UNDER LIBYAN SANCTIONS

On 3rd February, EU Regulation 2018/166/EU amended the details of the vessel, Lynn S.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.031.01.0082.01.ENG&toc=OJ:L:2018:031:TOC

See also EU Council decision 2018/167/CFSP –

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.031.01.0084.01.ENG&toc=OJ:L:2018:031:TOC

UN EXPORTS SAY NORTH KOREA BROUGHT IN $200 MILLION IN 9 MONTHS DESPITE SANCTIONS

The New York Post and CBS News report that North Korea is flouting UN sanctions on oil and gas, engaging in prohibited ballistic missile co-operation with Syria and Myanmar, and illegally exporting commodities that brought in nearly $200 million in just 9 months last year, according to UN experts, and it continues to engage in “widespread conventional arms deals and cyber operations to steal military secrets”.  Experts said North Korea also exported $125 million of iron ore to China last year in violation of sanctions.  US ambassador Nikki Haley said sanctions now ban well over 90% of North Korea’s exports reported in 2016.

In the CBS article, the Chair of the UN Panel of Exports that produced the report on sanctions busting, is said to have shown the “60 Minutes” team a series of photos of rocket debris.  Investigators could trace where the parts came from.  Some parts had a manufacturer’s logo and serial numbers on them, allowing investigators to trace the origin and supply chain. And one component, called a pressure transmitter, was sourced to a well-known company in the West, a “major transatlantic defence contractor” manufactured in the UK by a company whose name is a household name in the US.

Amongst the claims are that North Korean technicians continue to operate at Syrian missile & chemical weapon facilities in Barzah, Adra and Hama, according to intel provided for the UN’s report.  2 North Korea-linked shipments of items to Syria had enough material to build a “large-scale” industrial chemical weapons facility.  UN investigators also cite evidence North Korea is helping Syria develop a chemical weapons programmes, pointing to shipped items that can be used for a program and technician visits.  In fresh revelations, the UN report cites evidence Myanmar is buying ballistic missiles systems & conventional weapons from North Korea:

https://www.cbsnews.com/news/un-experts-say-north-korea-brought-in-200m-despite-sanctions/?src=ilaw

RUSSIAN OLIGARCHS IN UK TOLD TO EXPLAIN LUXURY LIFESTYLES

On 3rd February the BBC reported that the security minister has said that Russian oligarchs suspected of corruption will be forced to explain their luxury lifestyles in the UK. The article is linked to the introduction of Unexplained Wealth Orders by the Criminal Finances Act 2017 and the “McMafia” series currently running on BBC TV- so I think you can take it that the authorities will not actually be going out quizzing wealthy Russians…

http://www.bbc.co.uk/news/uk-42926819?src=ilaw

US FEDERAL RESERVE RESTRICTS WELLS FARGO’S GROWTH IN UNPRECEDENTED PUNISHMENT AFTER FRAUD SCANDAL 

The New York Daily News reports that the US Federal Reserve imposed an unusually harsh punishment on Wells Fargo for the “widespread consumer abuses” uncovered in the bank’s fraud scandal. It will not be allowed to grow beyond the $1.95 trillion in assets it had at the end of last year “until it sufficiently improves its governance and controls”.  In 2016, Wells Fargo forked over a hefty $185 million settlement after employees opened 3.5 million unauthorized bank accounts and credit cards without their customers’ consent.  Employees, pressured by internal sales targets, used fake email addresses and forged signatures in the widespread practice known as “sandbagging”; the bank also sold auto insurance to customers who did not need it and admitted its mortgage bankers unfairly charged customers fees to lock in interest rates; it also overcharged their corporate clients on foreign exchanges and levied unusually high transaction fees, according to a Wall Street Journal report in November.

www.nydailynews.com/news/national/federal-reserve-restricts-wells-fargo-growth-demands-board-mem-article-1.3796272?src=ilaw

UK AUTHORITIES LEAVE NAB TEAM FROM PAKISTAN HIGH AND DRY

The News in Pakistan reports that the country’s National Accountability Bureau (NAB) team that recently visited London failed to make a breakthrough in its quest for obtaining actionable evidence in relation to the ongoing cases against Nawaz Sharif and his children.  The newspaper says that the UK’s Central Authority (UKCA) International Criminality Unit and NCA had not shared any new information with the NAB, and that “no other organ of the state has provided any information against Hasan and Hussain Nawaz Sharif which could helpful for the NAB in its case”.  Former PM, Nawaz Sharif, his sons Hassan and Hussain Nawaz, his daughter Maryum Nawaz and his son-in-law MNA Captain (R) Safdar have been accused in the reference filed by the NAB but all of them deny any wrongdoing and stress that these cases are politically motivated.

https://www.thenews.com.pk/print/276294-uk-authorities-leave-nab-team-high-and-dry?src=ilaw

US INVESTORS SEEK APPROVAL FOR LARGE PAY-OUT IN PETROBRAS CORRUPTION SCANDAL

According to Oil Price, PwC’s Brazilian subsidiary disclosed in a Manhattan court that $3 billion in settlements regarding an ongoing corruption scandal in Brazil need to be approved by the country’s parliament, including a $50 million settlement with the ordeal’s main auditor, PwC, according to a new report by Reuters.  Investors in Petrobras are due to receive $2.95 billion to settle a class action lawsuit targeting the state-run company for losses in share value after the corruption probe exposed the depths of official mismanagement.  If a $285 million deal in the US is approved, it would the largest pay-out to US investors from a foreign company in history, Reuters reports, though the total pay-out is smaller than analysts expected.

https://oilprice.com/Latest-Energy-News/World-News/US-Investors-Seek-Approval-For-Large-Payout-In-Petrobras-Corruption-Scandal.html?src=ilaw

WHY DOES CHINA SUDDENLY WANT TO CRACK DOWN ON GANGS?

Epoch Times posed this question on 2nd February.  By initiating a campaign to clean up criminal gangs, it is said. The phrase is used to describe efforts to stamp out anything that could cause social unrest or dissent against the authorities.  Criminal gangs and their violent activities could cause public disturbance, so the regime’s purported crackdown can act as a deterrence.  It is claimed that gangs and police in China often form an alliance to benefit each other: gangs bribe the police to get them off the hook, while police and corrupt officials can have gang members do their bidding.

https://www.theepochtimes.com/why-does-china-suddenly-want-to-crack-down-on-gangs_2431052.html?src=ilaw

POLICE CAN’T FIND OWNER OF $800,000 SEIZED AT TORONTO’S PEARSON AIRPORT

Global News in Canada reports that the cash, $797,790 in total, was seized last spring at the airport and has been determined to likely be proceeds of crime.  Under the Police Services Act, the money is to be transferred to the local police services board.  The cash was seized on April 19th 2017, after a bag checked by a woman flying from Toronto to Vancouver was deemed suspicious and searched. Police say the woman was allowed to remain on the flight and was interviewed by Vancouver police, but denied any knowledge of the bag’s contents and has made no move to claim it.

https://globalnews.ca/news/4003249/police-owner-toronto-pearson-airport/?src=ilaw

US JUDGE ORDERS RUSSIAN-OWNED COMPANY TO PAY $6 MILLION

Reuters on 3rd February reported that a US judge has ordered a Russian-owned corporation, Prevezon Holdings Ltd, to pay a $5.9 million settlement it reached last year with US prosecutors over allegations that it laundered proceeds of a $230 million tax fraud.  The company is owned by Russian businessman Denis Katsyv, and argued that the deal did not require it to pay until authorities in the Netherlands released certain assets they had frozen there.  The case dates back to 2013 and the fraud was first uncovered by Sergei Magnitsky, an accountant with Hermitage Capital who subsequently died in a Russian prison (and after whom the Magnitsky laws penalising those allegedly involved in human rights abuses are named).

https://www.reuters.com/article/us-usa-russia-prevezon/u-s-judge-orders-russian-owned-company-to-pay-6-million-settlement-idUSKBN1FM2FJ?src=ilaw

MULTI-BILLION AIRCRAFT LEASING SECTOR PAYS JUST €40 MILLION IN TAX IN IRELAND

On 3rd February the Irish Independent reported that, according to provisional figures, the approximately 2,600 aircraft leasing companies in Ireland paid only around €40 million in taxes last year, an average amount of €15,384.  A recent Central Bank study into the industry here showed that revenues rose from €9.4 billion in 2014 to €11.8 billion in 2015.  Ireland is home to 9 of the 10 largest aircraft leasing firms in the world and some of the big players based in Ireland include Aercap, SMBC, Pembroke Capital, Awas Capital, GECAS and Avolon.  There are more than 4,000 aircraft under Irish management and together Irish-based lessors account for more than $125 billion in aircraft assets.

https://www.independent.ie/business/irish/multibillion-aircraft-leasing-sector-pays-just-40m-in-tax-36562460.html

CONVICTED FRAUDSTER BARRY HUGHES HANDS OVER £53,000 IN ASSETS

The Daily Record in Scotland reports that convicted fraudster Barry Hughes has handed over £53,000 in assets following receiving a confiscation order last February for £53,412 of realisable assets.  These included a £5,600 Vertu Constellation mobile phone, Rolex Daytona watches valued at £6,170 and £6,310, and Cartier watches worth £2200 and £3,250.  But prosecutors can still pursue Hughes for the rest of the £2.9 million – reduced from almost £5.4 million on appeal last August – agreed to be his “benefit figure” from crime.  Hughes featured on a BBC TV programme telling how crooks and businessmen allegedly exploit weaknesses in the bankruptcy system to keep hold of their cash; he had declared himself bankrupt in 2014 owing £10 million and claiming he had no assets, but the BBC expose said he had been seen driving luxury cars worth £500,000.

https://www.dailyrecord.co.uk/news/scottish-news/convicted-fraudster-barry-hughes-hands-11961862

US COMMODITY FUTURES TRADING COMMISSION CHARGES MY BIG COIN PAY, INC. AND ITS FOUNDERS WITH FRAUD AND MISAPPROPRIATION OF CUSTOMER FUNDS IN VIRTUAL CURRENCY SCHEME

Shearman & Sterling on 2nd February reports the filing of an enforcement action charging Nevada-based firm My Big Coin Pay, Inc. and its founders with operating a scheme through which they fraudulently offered the sale of a virtual currency, known as “My Big Coin”. This enforcement action follows 2 CFTC enforcement actions against other fraudulent virtual currency schemes within the preceding week.

https://www.jdsupra.com/legalnews/us-commodity-futures-trading-commission-95727/

THE ABC OF INVESTING IN ICO

On 2nd February, US law firm Pepper Hamilton produced this guide to Initial Coin Offerings.  It is an ABC of questions to ask to protect yourself.

https://www.jdsupra.com/legalnews/the-abcs-of-investing-in-icos-30027/

MALTA SUSPENDS MAFIA-LINKED PHOENIX ONLINE GAMBLING LICENCE

Malta’s gaming regulator has suspended the licence of an online gambling operator linked to an Italian anti-mafia police action.

https://calvinayre.com/2018/02/02/business/malta-suspends-phoenix-online-gambling-license/

PANAMA REGULATOR TAKES CONTROL OF BROKERAGE FIRM WEBSITE

Kenneth Rijock in his blog reports that the Superintendency of Securities (SMV) has intervened in Panama Wall Street SA, a Panama City brokerage firm whose foreign clients have reportedly sustained major losses, and where securities fraud is alleged to have occurred. The SMV actually took over the firm’s website, and posted its Notice of Intervention there.  The company is said to be controlled by a Dutch national, Jochem Bernard Buse, and it has been linked to the American expat, Gary James Lundgren, who was recently banned for life from securities trading by FINRA.

http://rijock.blogspot.com/

US ARMS EXPORT RESTRICTIONS ON SOUTH SUDAN

On 2nd February the US State Department issued a news release that announces that it is implementing restrictions on the export of defence articles and defence services into South Sudan due to the continuing violence. The Department also encourage IGAD and the African Union to consider sanctions measures against those who undermine the peace process. The US is seeking support for a UN Security Council embargo on all arms flows into South Sudan and we urge all Security Council members to join the US in supporting this action. The message must be clear, it says – the US, the region, and the international community will not stand idly by as innocent South Sudanese civilians are murdered.

https://www.state.gov/r/pa/prs/ps/2018/02/277849.htm

ATTORNEY GETS 7 YEARS FOR LAUNDERING $2 MILLION

Law 360 on 2nd February reported that a former Venable LLP and Arent Fox LLP patent attorney, Raymond Ho, has been sentenced to 7 years in prison after he pled guilty to laundering more than $2.1 million as part of a “catfishing” scheme uncovered by US Immigration and Customs Enforcement during which agents posed as human and illegal arms traffickers.

https://www.law360.com/articles/1008642/ex-venable-atty-gets-7-years-for-laundering-2m

VOLUNTEER JAILED FOR STEALING £35,000 FROM SALES OF POPPIES IN JERSEY
On 3rd February the Jersey Evening Post reported that a volunteer – a former honorary policeman, community volunteer and charity fundraiser has been jailed for stealing £35,000 from sales of poppies
https://jerseyeveningpost.com/news/2018/02/03/volunteer-jailed-for-stealing-35000-from-sales-of-poppies/#exrWKqHk6VD6EY3W.99

ARKANSAS STATE SENATOR PLEADS GUILTY TO WIRE FRAUD, MONEY LAUNDERING AND BANK FRAUD

On 30th January, Baker McKenzie reported that Arkansas state Senator Jake Files has pleaded guilty to wire fraud, money laundering and bank fraud in connection with a $46,500 grant he fraudulently obtained for use on a local sports complex.

www.riskandcompliancehub.com/arkansas-state-senator-pleads-guilty-to-wire-fraud-money-laundering-and-bank-fraud/

US WARNS OF ASSAD’S EVOLVING CHEMICAL WEAPONS MUNITIONS

Janes.com on 2nd February reported that forces loyal to Syria’s President Bashar al-Assad are developing new munitions to deliver chemical weapons, US officials told journalists on 1st February.  The officials said Assad’s forces had continued to make occasional and relatively small-scale use of chemical weapons since the 4th April 2017 sarin attack on Khan Shaykhun that prompted the US to bomb Al-Shayrat Air Base. Recent attacks had involved both sarin and chlorine, they said.

http://www.janes.com/article/77559/us-warns-of-assad-s-evolving-cw-munitions

US WARNS COUNTRIES AGAINST AIDING TERRORISTS EYEING NUCLEAR WEAPONS

The Pakistan Observer, amongst others, reports that the US has warned countries against supporting non-state actors and terrorist groups trying to obtain or employ nuclear weapons.  “The US will hold accountable any state or non-state actor that supports terrorist efforts to obtain or employ a nuclear weapon,” Under-Secretary of State for Political Affairs, Tom Shannon, told reporters at a Pentagon news conference where the Trump administration rolled out its 2018 Nuclear Posture Review (NPR).  Neither Shannon nor the NPR report, running into 100 pages, identified any country which could be seen aiding terrorist groups in this regard.  Shannon said that nuclear terrorism remained a major threat in the 21st century and countries need to work to mitigate it.

https://pakobserver.net/us-warns-countries-aiding-terrorists-eyeing-nuclear-weapons/

GAO: FOREIGN ARMS SALES WAIVERS COST THE US BILLIONS

Defense News on 2nd February reports that over the past 6 fiscal years foreign military sale (FMS) waivers for non-recurring costs approved by the Department of Defense totalled nearly $16 billion, according to a Government Accountability Office report.  Although the US sold $32 billion of weapons through FMS last year, one area where these inefficiencies are most apparent is the waiver review process for non-recurring costs.  Under the Arms Export Control Act, DoD is required to recover non-recurring costs (like one-time programme expenditures for production testing lines) from foreign buyers. However, these costs can be waived under certain circumstances.

https://www.defensenews.com/pentagon/2018/02/02/gao-foreign-arms-sales-waivers-cost-us-billions/

MALTA GOVERNMENT SAYS NO REASON FOR ITS FIU TO SUSPECT CRIMINAL ACTIVITY IN REPORTS LEAKED BY MURDERED JOURNALIST

The Malta Independent on 3rd February reported that the Government of Malta has come to the “logical conclusion” that the Financial Intelligence Analysis Unit (FIAU) did not find “reasonable grounds to suspect criminal activity” when referring to leaked reports in the media.  The statement came in a 44-page report replying to a rule of law report penned by MEPs earlier this year.  A delegation of MEPs were investigating the rule of law in Malta after journalist Daphne Caruana Galizia was brutally murdered in a car bomb on 16th October.  In the wake of the allegations made by the victim, multiple FIAU reports were leaked to the press detailing alleged wrongdoing involving illicit payments.

http://www.independent.com.mt/articles/2018-02-03/local-news/Government-concludes-FIAU-found-no-reasonable-grounds-to-suspect-criminal-activity-6736184409

WHY ONGOING MONITORING IS IMPORTANT IN COMPLIANCE INVOLVING AUTOMATION AND HIGHER-RISK MARKETS

In an article dated 5th February concerning the use of advanced technology in compliance, the Red Flag Group in the US says that while there is no doubt that the advancements in technology are changing the way we do business, technology has a big influence on our daily activities, and automation has also undoubtedly helped reduce overdependence on human resource and its related overhead costs.  It asks how compliance officers can use automation to help them, and says that ongoing due diligence monitoring remains necessary.

https://insights.redflaggroup.com/articles/why-ongoing-monitoring-is-important-in-underdeveloped-high-risk-markets

BERMUDA AML/CFT AWARENESS CAMPAIGN

Payments Compliance on 2nd February referred to the “Just Good Business” campaign launched on 31st January by Bermuda to raise awareness of AML/CFT requirements and standards, to ask for participation by its citizens, with a mutual evaluation review to FATF standards due by the CFATF during 2018.

https://paymentscompliance.com/premium-content/research_report/bermuda-government-launches-just-good-business-campaign

See the campaign launch at –

https://www.gov.bm/articles/just-good-business-campaign

AUSTRALIA IS TIED UP IN AN INVESTIGATION INTO ILLEGAL FUND MOVEMENTS WITH CRYPTO LINKS TOTALLING $480 MILLION
Business Insider on 2nd February reports that South Korean authorities are investigating the illegal transfer of funds to Australia involving cryptocurrency transactions totalling hundreds of millions of dollars.  The Korean Customs Service (KCS) said it was investigating illegal foreign currency transactions totalling 637.5 billion Korean won (around $A740 million).  The majority of that amount related to the exchange of funds between South Korean and Australian bank accounts, according to Korean authorities.

https://www.businessinsider.com.au/cryptocurrency-investigation-illegal-money-transfers-australia-and-south-korea-2018-2#xyCGlRUeIZCHXjhQ.99

3 MONEY LAUNDERERS WHO USED THEIR PROCEEDS TO FUND JET-SET LIFESTYLES WITH 5-STAR HOTEL STAYS AND PORSCHES ARE JAILED FOR A TOTAL OF 7 YEARS IN WALES
The Daily Mail on 2nd February reported that 3 people have been convicted of money laundering after an investigation found that they had used their ill-gotten gains to fund a luxury jet-set lifestyle.  Ebrahim Ege, 33 and Amer Aslam, 35, from Cardiff and Emma Cummings, 30, from Penarth, were convicted following a money laundering investigation across the south Wales region.  They were convicted at Newport Crown Court, had lived extravagant lifestyles with luxury cars and regular trips to destinations like Dubai and Abu Dhabi, often staying at 5-star resorts.

http://www.dailymail.co.uk/news/article-5348077/Welsh-crooks-jailed-luxury-money-laundering-lifestyle.html#ixzz564ULx9vl

US BAR ASSOCIATION OPPOSES AML BILL REQUIRING SAR FROM LAWYERS

On 2nd February, the ABA Journal reports that American Bar Association President Hilarie Bass is expressing concerns that an AML Bill would undermine the attorney-client privilege and impose “burdensome and intrusive regulations” on small businesses and their lawyers. The ABA opposes provisions that would regulate many lawyers and law firms as financial institutions under the Bank Secrecy Act when they help clients to establish small corporations and limited liability companies.

See also the ABA news release at –

https://www.americanbar.org/news/abanews/aba-news-archives/2018/02/aba_sends_letterto.html

and letter to Senate members at –

https://www.americanbar.org/content/dam/aba/uncategorized/GAO/1feb2018-abalettertosjcopposings1454.authcheckdam.pdf

www.abajournal.com/news/article/aba_opposes_anti_money_laundering_bill_requiring_suspicious_activity_report

WHY ILLICIT FOREIGN CASINO CASH OFTEN GOES STRAIGHT INTO VANCOUVER HOUSING

On 2nd February, the Vancouver Sun published an article about “dismaying” stories that Postmedia investigative reporter Sam Cooper has been producing about the laundering of hundreds of millions of dollars of East Asian cash through Metro Vancouver casinos and the funnelling of much of it into the city’s pricey real estate.

http://vancouversun.com/opinion/columnists/douglas-todd-why-illicit-foreign-casino-cash-often-goes-straight-into-vancouver-housing

CONTINUED CONCERN ON KENYA

Unrest and alleged human rights abuses continue in Kenya as Defence Web reports that authorities had arrested an opposition lawyer and defied a court order to lift a ban on 3 private TV stations that had covered the symbolic presidential inauguration of opposition leader, Raila Odinga.  The office of the UN High Commissioner for Human Rights in Geneva said it was concerned at the government’s “attempts to interfere with the rights to freedom of expression”.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50596:kenya-arrests-lawyer-keeps-tv-stations-shut-after-odinga-inauguration&catid=54:Governance&Itemid=118

INDIA “TO NAIL” PAKISTAN ON TERROR-FUNDING AT FATF MEETING THIS MONTH

The Statesman in India reports that India is “set to turn the heat on” Pakistan on the issue of terror-funding at the plenary of FATF in Paris from 18th February.  It says that, according to informed sources, New Delhi was in touch with key powers like the US and Russia to enlist their support in cornering Pakistan and putting pressure on it to take steps to check terror-funding.  The week-long meeting in Paris meeting will review Islamabad’s attempts to make its legal regime and law-enforcing machinery more effective to check flow of funds to terrorist networks.  It reports that, at the Buenos Aires plenary in November last year, India, backed by the US and Russia, had succeeded in asking Pakistan to submit a compliance report at the coming Paris meeting on action taken by Islamabad against terror groups like the Lashkar-e-Taiba (LeT) and the Jamaat-ud Dawa (JuD).  For the first time, Pakistan’s Central Bank, the State Bank of Pakistan (SBP), was asked specifically to report on its work in shutting off the finances to these terror groups.

https://www.thestatesman.com/india/india-nail-pakistan-terror-funding-fatf-meet-month-1502579003.html?src=ilaw

“DO BRITISH COURTS REALLY NEED TO PROTECT THE WORLD’S MOST CORRUPT INDUSTRY?”

On 3rd February, the Middle East Monitor carried an article which refers to a UK court sentencing 5 protesters arrested last summer for demonstrating near the arms expo in London’s ExCel exhibition centre, the Defence and Security Equipment International (DSEI).  The judges rejected the defendants’ claim that they were exercising their right to freedom of speech and assembly before finding them guilty of “Obstruction of a Highway”.   However, says the article, nothing is as it looks like when it comes to the arms industry.  The case against the 43 activists, which is ongoing, is part of a long-running battle between rights groups and sections of the British establishment which, it seems, would prefer arms’ sales to continue unopposed.

https://www.middleeastmonitor.com/20180203-do-british-courts-really-need-to-protect-the-worlds-most-corrupt-industry/?src=ilaw

BELGIAN COURT: PAYMENT OPERATORS SHOULDN’T TRANSMIT PAYMENT DATA TO TAX AUTHORITY

The Brussels Times on 3rd February reports that Antwerp criminal court rejected the request put forth by the Special Taxation Inspectorate (ISI) that wanted to have a glimpse at all foreign credit card payments in Belgium.  ISI wants to determine which Belgians use their black money coming from fiscal paradises such as Luxembourg, Switzerland or Monaco, to make purchases in Belgium.  The transaction data could constitute an important weapon in the battle against tax evasion.  Tax authorities had asked the payment operators to provide them with all data from all foreign payment cards that had been used in Belgium in 2015 and 2016. The companies had not responded to this request, which led to an assignation before a court of justice.

http://www.brusselstimes.com/belgium/10221/payment-operators-shouldn-t-transmit-payment-data-to-isi?src=ilaw

DRUG TRADE FLOURISHES IN AFGHANISTAN AS TALIBAN’S REACH GROWS

Axios reports on 3rd February that opium poppy production is at an all-time high in Afghanistan, increasing 87% — from 4,800 to 9,000 tons — over the past year, according to a US government report. This is providing a crucial revenue stream for the Taliban, which has been gaining territory in the 16th year since the US invasion.

https://www.axios.com/as-taliban-controlled-land-in-afgha-1517522220-6e465d59-c130-4de7-bda3-7804598658e8.html?src=ilaw

SPAIN EXTRADITES RUSSIAN CITIZEN ACCUSED OF CYBERCRIMES TO US

On 3rd February, Rferl reports that Spain has extradited to the US a Pyotr Levashov, a Russian citizen who is accused by US authorities of running massive cybercrime campaigns, including the use of ransomware, scam e-mail distributions, and fraudulent stock promotions. Spain’s National Police said officers handed him over to US marshals on February 2nd.  He was arrested in April while vacationing with his family in Barcelona.

https://www.rferl.org/a/spain-extradites-russian-citizen-cybercrimes-united-states/29016020.html?src=ilaw

POLISH MAN FIGHTING EXTRADITION FROM IRELAND CITING THE ALLEGED CORRUPTION OF HIS OWN COUNTRY’S LEGAL SYSTEM

The Journal on 3rd February reports that the Irish High Court is set to rule on a unique extradition case in the coming weeks regarding a Polish man who is wanted in his own country in connection with alleged drug trafficking offences.  Artur Celmer has been living in Ireland for 10 years. He has now been in custody for the past 9 months pending 3 separate extradition orders served against him by his home country.

http://www.thejournal.ie/artur-celmer-extradition-high-court-3829922-Feb2018/?src=ilaw

PROCEEDS OF CRIME TO PAY FOR EXTENSION TO JERSEY PRISON
A ministerial decision to use £6.5 million from the Criminal Offences Confiscation Fund to pay for the new prison building was signed off by Infrastructure Minister Eddie Noel.  The Fund is a pool of money taken from people convicted for crimes such as drug trafficking or financial fraud. The amount of money collected can greatly vary from year to year.  The largest annual sum in recent years was £29 million collected in 2011, which was largely due to £26 million being confiscated from Indian businessman Raj Arjandas Bhojwani, who tried to launder $43 million through Jersey bank accounts, but by contrast only £26,000 was collected in 2009.  The article details some recent grants made from the Fund.

https://jerseyeveningpost.com/news/2018/02/02/proceeds-of-crime-to-pay-for-extension-to-the-prison/#jAXWbcSGD6GJSDJE.99

HONG KONG HAS TO BANK ON BETTER ATM SECURITY

Customs Today on 3rd February reports that a surge estimated at HK$20 billion a month in suspicious ATM withdrawals in Hong Kong is attributed to a crackdown on money laundering in Macau. Authorities there drove out organised ATM withdrawal gangs by upgrading security. The operations have apparently stayed in business simply by moving into Hong Kong.

http://www.customstoday.com.pk/hong-kong-has-to-bank-on-better-atm-security/

THE UK SPACE INDUSTRY BILL 2017-2019

On 2nd February the House of Commons Library issued a briefing on this Bill which, inter alia, creates a framework for the regulation of spaceflight activities in the UK in line with the UK’s international obligations; establishes a system of licencing for UK space activities; creates a framework to establish a launch site in the UK, including creating powers for the Secretary of State to make orders over land; creates a framework for liability, indemnities and insurance for UK space activities; and creates new offences and applies existing UK criminal law to space activities.

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8197

MEXICAN STATE ALLEGES EX-GOVERNOR BOUGHT HOUSTON-AREA HOMES WITH STOLEN MONEY

On 2nd February, Baker McKenzie reports that the Mexican state of Veracruz filed civil lawsuits this week alleging that dozens of Houston-area properties were bought with millions of dollars stolen by the state’s now-jailed former governor.  Javier Duarte de Ochoa has been charged by Mexican authorities with diverting nearly $3 billion from the coffers of the oil-rich state into various shell companies and properties around the world.

http://www.riskandcompliancehub.com/mexican-state-alleges-ex-governor-bought-houston-area-homes-with-stolen-money/

EFTA

On 2nd February the House of Commons Library issued a briefing providing information on the European Free Trade Area in advance of a Westminster hall debate on 8th February.

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CDP-2018-0031

NORTH KOREA IS DODGING SANCTIONS WITH FISH AND FRONT FIRMS IN MOZAMBIQUE

CNN on 3rd February carried a report which says that fishing is big business in Mozambique – it’s one of the country’s most lucrative industries, and North Korea wants a slice of that much-needed cash, and boats are easy to move and conceal.  Joint fishing ventures are just one area of illicit trade the 2 countries are engaged in.  In a months-long investigation, CNN uncovered a secret web of front companies, military co-operation and elite-forces training deals between North Korea and Mozambique, all in violation of international sanctions, according to UN investigators – and sealed with illegal contracts worth millions of dollars. The money is funnelled through regionally-based North Korean diplomats to Pyongyang.

http://edition.cnn.com/2018/02/03/africa/north-korea-mozambique-sanctions-intl/index.html

CONTINUED NORTH KOREAN-SYRIA WEAPONS CONNECTIONS

Ian Talley of the Wall Street Journal in his Twitter account states that North Korean technicians continue to operate at Syrian missile & chemical weapon facilities in Barzah, Adra and Hama, according to intelligence provided for the UN’s latest report.

https://twitter.com/IanTalley

PRE-RADICALISATION CRIMINAL ACTIVITY IS STRONGEST PREDICTOR OF POST-RADICALISATION VIOLENT EXTREMISM

A study published by the National Consortium for the Study of Terrorism and Responses to terrorism (START) in the US on 25th January states that individuals who engaged in non-violent or violent crime prior to radicalizing were 1.85 times more likely to engage in acts of violent extremism after radicalizing than were extremists without criminal histories, according to new analysis of START’s “Profiles of Radicalization in the United States” dataset.  A new research brief includes an analysis of the likelihood of pre-radicalization criminality for US extremists, a look at the pre-radicalisation criminal behaviours that are most prevalent amongst extremists with criminal histories, and information on the average age of earliest criminal activity for non-violent and violent extremists.

www.start.umd.edu/news/pre-radicalization-criminal-activity-strongest-predictor-post-radicalization-violent-extremism

Other material from START includes a Factsheet analysing US deaths in terrorist attacks 1995-2016, both inside and outside the USA –

http://www.start.umd.edu/pubs/START_AmericanTerrorismDeaths_FactSheet_Nov2017.pdf

And a Background Report: “Ideological Motivations of Terrorism in the United States, 1970—2016” –

http://www.start.umd.edu/pubs/START_IdeologicalMotivationsOfTerrorismInUS_Nov2017.pdf

stats

CNN: NORTH KOREA IS DODGING SANCTIONS WITH FISH AND FRONT FIRMS IN MOZAMBIQUE

CNN on 3rd February carried a report which says that fishing is big business in Mozambique – it’s one of the country’s most lucrative industries, and North Korea wants a slice of that much-needed cash, and boats are easy to move and conceal.  Joint fishing ventures are just one area of illicit trade the 2 countries are engaged in.  In a months-long investigation, CNN uncovered a secret web of front companies, military co-operation and elite-forces training deals between North Korea and Mozambique, all in violation of international sanctions, according to UN investigators – and sealed with illegal contracts worth millions of dollars. The money is funnelled through regionally-based North Korean diplomats to Pyongyang.

http://edition.cnn.com/2018/02/03/africa/north-korea-mozambique-sanctions-intl/index.html